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Economy in Brief

Foreign Orders Continue To Lead Way Higher
by Robert Brusca   January 24, 2011

Orders in the Euro-Area scooted ahead by 2.1% in November after rising smartly by 1.4% in October. Together the two months still do not restore the ground lost in the 4.2% drop of September. Domestic orders have dropped by about two percent in September and again in October, then risen by 2% in November. Foreign orders crashed by 4.2% in September recovered by 1.3% in October then spurted by 4.5% in November. Obviously foreign orders are taking the lead.

Many of the 'foreign' orders of Euro-Area countries represent nonetheless orders and sales of goods that do not cross and currency boundaries. For example, German exports include both exports to France which is within the zone and exports to the US which assuredly is not within the zone. Although with varying degrees of intensity Europe is in the same business cycle so it is not surprising to find that the oscillations of the Zone's domestic orders and 'foreign' orders have many of the same characteristics. Orders are compiled according to those for the domestic and nondomestic markets.

Among the Member States for which data are available, total manufacturing industries working on orders say orders rise in seventeen, fall in four and remain unchanged in one (Denmark) member country.

In November 2010 compared with October 2010, new orders for capital goods rose by 1.8% in the euro area and by 2.8% in the EU27. Intermediate goods orders increased by 1.3% in both the zone and the broader EU area. This was less than for capital goods alone, because of the weakness in consumer goods. Durable consumer goods orders fell by 0.9% in the euro area. Non-durable consumer goods orders decreased by 1.5%. The consumer sector is not leading Europe out of wilderness.

Nonetheless the Orders data are making consistent gains and the preliminary monthly PMI reports for January remain quite firm. In Europe the services sector is improving while manufacturing which has been much stronger took a small step down in the level of its January PMI.

Selected Euro-Area Industrial Orders
SAAR Except M/M Mo/Mo Nov
10
Oct
10
Nov
10
Oct
10
Nov
10
Oct
10
Euro-Area Detail Nov
10
Oct
10
Sep
10
3Mo 3Mo 6Mo 6Mo 12Mo 12Mo
MFG Orders 2.1% 1.4% -4.2% -3.3% 9.2% 10.6% 15.0% 16.7% 18.0%
MFG Sales 1.3% 2.2% -2.1% 5.8% 10.8% 6.4% 13.5% 11.5% 11.5%
Consumer 0.2% 0.5% -1.4% -2.8% 0.3% -1.4% 6.0% 3.4% 4.5%
Capital 0.2% 4.8% -2.6% 9.5% 24.2% 10.7% 23.5% 12.3% 12.5%
Intermediate 2.0% -2.1% -2.0% -8.8% 1.4% 3.5% 4.9% 9.6% 9.2%
Memo:MFG
Total Orders 2.1% 1.4% -4.2% -3.3% 9.2% 10.6% 15.0% 16.7% 18.0%
E-13 Domestic MFG orders 2.0% -2.1% -2.0% -8.8% 1.4% 3.5% 4.9% 9.6% 9.2%
E-13 Foreign MFG orders 4.5% 1.3% -4.2% 5.8% 7.7% 13.8% 15.4% 24.0% 22.8%
Countries: Nov
10
Oct
10
Sep
10
3Mo 3Mo 6Mo 6Mo 12Mo 12Mo
Germany(MFG): 5.3% 1.4% -3.4% 12.8% 5.9% 19.4% 8.3% 25.0% 22.8%
France(Ind): 1.5% 2.4% -1.4% 10.2% 0.9% 15.1% 13.8% 15.6% 13.8%
Italy(Ind): -4.3% -0.2% -1.4% -21.2% 21.5% -5.7% 8.9% 10.0% 15.4%
Spain(Ind): 2.2% -3.4% -1.5% -10.5% 4.5% 2.9% 4.1% 11.5% 2.2%
Compare: US Factory Orders 0.7% -0.7% 3.0% 12.8% 9.7% 6.1% 0.8% 8.7% 9.1%
Some Euro-Area reporters are timely and some lag. This table allows a sequential inspection of trends regardless of topicality
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